Financial Crime World

Registration Matters Leave Room for Improvement in Fight Against Money Laundering and Terrorism Financing

Overview

Despite progress made by the Multisectorial Executive Commission against money laundering and financing of terrorism (CONTRALAFT), vulnerabilities persist in Peru’s system to prevent and combat these crimes.

Challenges Identified

According to the “Anti-Money Laundering Index 2017” published by the Basel Institute on Governance, Peru has regressed significantly in its efforts to combat money laundering and terrorist financing. The country ranks poorly due to:

  • Difficulties in accessing information affected by bank and fiscal secrecy regulations
  • Lack of obligation to register information on the real holder of legal persons

Role of Public Registry

The Public Registry plays a crucial role in preventing and combating these crimes, but SUNARP’s ability to detect suspicious activities is hindered by these vulnerabilities. The registry has signed a cooperation agreement with the Financial Intelligence Unit (UIF) and has a Registry Intelligence Commission to identify irregularities, acts of corruption, and illegal registration.

Financial Intelligence Reports

The UIF-Peru reports that from January 2007 to November 2017, it issued financial intelligence reports involving over $14 billion in suspected transactions related to:

  • Drug trafficking
  • Illegal mining
  • Crimes against public administration
  • Tax fraud

Tax Amnesty Results

The expiration of the tax amnesty period in December 2017 led to disappointing results for the Treasury, with only $1.136 million collected, representing a mere 28.4% of the projected amount.

National Policy Against Money Laundering and Financing of Terrorism

The Ministry of Justice and Human Rights (MINJUS) has approved the “National Policy Against Money Laundering and Financing of Terrorism” through Supreme Decree 018-2017-JUS, which aims to strengthen the National System for Combating Money Laundering and Terrorist Financing. The policy is mandatory at all levels of government and in various sectors linked to:

  • Prevention
  • Detection
  • Investigation
  • Punishment of these crimes

Conclusion

Much remains to be done to effectively combat money laundering and terrorist financing in Peru. As poet César Vallejo once said, “There is still a lot to be done!”